All posts tagged venture capital

A little bit of PayPal founder Peter Thiel’s wealth will help New Zealand technology businesses thanks to the launch of a new venture capital project.

The U.S. entrepreneur, who was one of Facebook’s first investors, is to establish a new 40 million New Zealand dollar (US$32 million) Kiwi-focused venture capital fund jointly with the New Zealand Venture Investment Fund, or NZVIF, to support local technology developments.

China has reached parity with Europe in venture capital financing for the first time ever.

According to data from Dow Jones VentureSource, in 2011 Chinese companies received $6 billion in venture capital equity financing, up 8% from the previous year, compared with $6.1 billion in Europe. That’s a sharp drop for European start-ups, who until 2009 were still receiving 86% more in venture capital financing than their Chinese counterparts, and 20% more in 2010.

SoftTech VC has raised a $55 million fund to make small investments in very young technology startups, a sign investors are growing more interested in the earliest stage of venture capital.

Bloomberg News

Jeff Clavier

Jeff Clavier, the former Reuters executive who founded the Palo Alto-based firm in 2007, said the new fund will allow him to make bigger initial investments in consumer Internet startups as well as more follow-on investments in the companies that show the most potential.

“We might as well have the ownership that reflects the amount of work we are doing,” Mr. Clavier said.

SoftTech’s previous investments include online financial service Mint, mobile game maker Tapulous and online ticket seller Eventbrite. More than 20 of the 110 companies Mr. Clavier has invested in have been acquired, including Mint as well as online shopping services Kaboodle and Milo.

EBay today announced it bought the technology and team behind Hunch, a Web startup that recommends restaurants, neighborhoods and clothes you might like based on your existing interests and those of your friends.

EBay says it will use Hunch’s technology to predict and recommend items available on eBay that people didn’t even know they were looking for. Michael Arrington earlier reported the acquisition pricetag was around $80 million.

But let’s put Groupon’s potential stock-market value in perspective. If Groupon manages to fulfill its IPO plans — and the company’s bankers are skilled in cramming IPO stock down investors’ throats– Groupon in 18 months has transformed from a financial non-entity to a company potentially worth as much as department store chain Nordstrom or Blackberry-maker Research in Motion.

Here is a look at how Groupon’s valuation has soared in less than two years:

This looks to be the fourth year in a row where venture capital investment will surpass fund-raising–and that has some people worried that start-ups are facing a hard winter.

“That is exactly the trend you would expect if you saw the venture capital industry shrinking, which is exactly what it is doing,” said Paul Maeder, a general partner at Highland Capital Partners and chairman of the National Venture Capital Association. “We’re in a shakeout. I don’t know whether it’s the beginning, the middle or the end.”

Are you tired yet of readingabouttheprivate exchanges such as Second Market and SharesPost, which allow investors to buy stock in Facebook and other private companies? Well, there’s a new kid on the block.

Cantor Fitzgerald is creating a private markets group to allow clients a chance to invest in stock of private companies and other non-public entities.

“For us this is an opportunity to be the dominant player in a very fragmented market,” Shawn Matthews, the firm’s chief executive, told our colleagues at VentureWire.

As Ty McMahan wrote at our sister blog Venture Capital Dispatch, social network Ning was just sold for a fraction of its valuation in recent years. That’s a warning to those boys in the Billion Dollar Startup Club, a once exclusive hotspot that is starting to grow crowded.

Keywell and Lefkofsky are making a fresh investment inWhosHere, an iPhone application that lets users text message with nearby strangers by using the location-pinpointing capabilities of the phone. The investment through Lightbank, Keywell and Lefkofsky’s Chicago-based seed fund, is close to $1.25 million, according to a person familiar with the matter.

As Deal Journal colleague Amir Efrati just reported, a fresh fundraising round for Twitter just valued the company as high as $7 billion.

How amazing is the freshly assigned worth of Twitter? Here’s a look at Twitter by the numbers:

Seven months: That’s about how long it took Twitter’s valuation to nearly double, from the $3.7 billion valuation in a December investment from Kleiner Perkins, to the $7 billion figure today….

$150 Million: That’s eMarketer’s estimate for Twitter’s potential revenue from advertising this year. If that’s an accurate picture of Twitter’s total revenue, that means Twitter now is valued at 47 times its estimated annual sales. By contrast, Google is valued at least than six times its estimated revenue for this year.

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Dealpolitik is Ronald Barusch's strategic look at deals currently making the headlines as well as the major forces at work in the deal-making world. He was a M&A lawyer with Skadden, Arps, Slate, Meagher & Flom for over 30 years. He retired in 2010 after 25 years as a partner at the firm. Click here for his current and archived columns.